Glossary of Terms A

Glossary of Terms

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# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z



401(k) plan (also called a Cash or Deferred Arrangement or CODA) – A plan under Section

401(k) of the Internal Revenue Code that allows employees to choose between receiving

compensation, and electing to have that compensation contributed on their behalf to a qualified

plan.



403(b) plan (also called a Tax Sheltered Annuity plan or TSA) – A plan under Section 403(b) of

the Internal Revenue Code that allows employees of certain charitable and educational institutions

to choose between receiving compensation, and electing to have that compensation contributed on

their behalf to a qualified plan.



404(c) plan – An individual account plan in which the participants or beneficiaries direct the

investment of their accounts from a range of options, and no plan fiduciary will be held responsible

for losses from that direction.



457 plan – A tax-deferred plan available to states and certain other political entities under Code

Section 457.



60-day roll-in contribution – A distribution an employee received from a former employer's

qualified plan, or withdrew from a conduit IRA, and deposited in a qualified retirement plan with the

current company that accepts rollovers. Mandatory tax withholding and a 60-day deadline apply.







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Abutment – The tooth or root that supports a bridge or other structure in the mouth to replace

certain natural teeth.



Accelerated contributions (catch-up contributions) – For tax-sheltered annuity plans, extra

contributions a participant may make in certain years to help make up for less than maximum

contributions in previous years.



Accident insurance – Coverage for bodily injury due to an accident.



Accidental death and dismemberment (AD&D) – Death or loss of a body part or function due to

an accident.



Accidental death and dismemberment (AD&D) insurance – Coverage for death or loss of a

body part or function due to an accident.



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Account balance plan (cash balance plan) – A type of defined benefit retirement plan that

expresses an employee's benefit as an account balance growing at a pre-announced rate of

interest. The company adds credits to the balance each year.



Accreditation – A term typically applied to hospitals and other health care facilities, as well as certain

health benefits plans, indicating that the facility or plan has met operating, quality and other standards

established by a third party review agency. Judged against a list of specific standards, the evaluation

is performed by a group called the National Committee for Quality Assurance (NCQA).



Accrued benefits – For a defined benefit retirement plan, benefits that a participant accumulates

based on years of service, expressed as a dollar amount of benefit to begin at the plan's normal

retirement age. For any other type of retirement plan, the accrued benefit is the balance in the

participant's account.



Actively at work – The employee is present on the job, or otherwise meets the plan's

requirements for being actively at work (such as on a holiday, was actively at work on the last

regularly-scheduled day).



Activities of daily living (ADLs) – Activities – such as dressing, feeding, and toileting – that a

participant needs to perform for self-care. ADLs may help determine a participant's eligibility for

benefits under a long-term care plan.



Acupuncture – The practice of piercing the body with fine needles to relieve pain, induce

anesthesia, and treat illness and injury.



Acupuncturist – A qualified provider who practices acupuncture.



Acute care – Treatment for a severe and short-term health problem.



AD&D – See “Accidental Death and Dismemberment.”



Adjudication – The process used by health plans to determine the amount of benefit payment for a

covered health care service. The term usually refers to the processing of a health care claim. The

process includes a review of whether the service is covered by the health plan and whether

deductibles, coinsurance, copayments or other benefit limits apply.



ADLs – See “Activities of Daily Living.”



Adoption assistance program – A program to reimburse employees for their eligible expenses to

legally adopt a child. The program may cover expenses such as adoption agency and legal fees,

pregnancy and hospital expenses of the birth mother, and immigration and naturalization

expenses.



Adoption leave – Leave of absence granted by a company due to adoption or placement of a

child for purposes of adoption.



Adult care assistance – See “Adult Care Services.”



Adult care services – Services to allow a disabled or elderly adult to function at home or in a

center.



Adult day care – Services during the day to allow a disabled or elderly adult to function at home or

in a center.

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Adult foster care – See “Adult Care Services.”



Advance directive – Sometimes called a “living will.” An advance directive is a legal document

that tells your physician what kind of care you want (and what kind of care you don’t want) if you

become ill and can’t make medical decisions or communicate your decisions (for example, if you’re

in a coma). Hospital staff will routinely ask you if you have an advance directive when you are

admitted to the hospital. Laws about advance directives vary in each state. You should be aware of

the laws in your state. If you have an advance directive, be sure your family and your physician

have copies and are aware of your wishes.



Advance notification – The advance notice an employee must give an employer when requesting

a leave under the Family Medical Leave Act of 1993 (FMLA).



After-tax contributions – Contributions to a qualified plan from an employee's pay after applicable

federal, state and local taxes are withheld.



After-tax premiums – Premium payments taken from an employee's pay after applicable federal,

state and local taxes are withheld.



Age reduction schedule – Under disability plans, the schedule showing when benefits stop or are

reduced when the employee reaches a particular age, or combination of age and number of years

disabled.



Allergy testing/treatment – Testing to determine the allergens to which a participant is allergic,

and treatment to reduce sensitivity to that allergen.



Allocation – Distribution of an amount. For example, an employer contribution may be allocated to

the accounts of eligible employees, or a contribution may be allocated among available investment

funds.



Allowable amount – The part of a provider's charge that is eligible for reimbursement (full or

partial) by a plan.



Allowable expense(s) – See “Covered Health Care Expense.”



Alternate payee – A spouse or former spouse with an interest in plan benefits under the terms of a

Qualified Domestic Relations Order (QDRO).



Alternative care or alternative treatment – Under some mental health and chemical dependency

programs, alternative care is more intensive than outpatient treatment and less intensive than

inpatient treatment. Examples may include partial hospitalization, residential treatment or care in a

halfway house or group home.



Ambulance – A vehicle that transports patients with acute medical conditions, and provides

paramedic and stabilizing medical services.



Ambulatory care – Services provided to an outpatient, the charges for which are eligible for

reimbursement (full or partial) by a health plan.



Ambulatory care facility – A facility providing outpatient services.







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Anesthesia – Local anesthesia involves administering agents to achieve the loss of conscious

pain in a specific part of the body. General anesthesia involves administering agents to render the

patient completely unconscious and without conscious pain response.



Anesthetic – A drug that produces loss of feeling.



Annual enrollment – The period of time a company designates each year in which an employee

may make changes in enrollment for certain benefits.



Annuitant – A person entitled to receive payments under an annuity.



Annuity – A contract that provides income in periodic payments for a specific period of time, or

payments made under such a contract.



Appeals process – Sometimes a health plan reviews a claim and denies payment for the medical

service you received. An appeals process lets you ask for a second review of your claim.



Appliance – In dental plans, a device used to provide a function or to heal. A fixed appliance is

attached to the teeth. A prosthetic appliance replaces a missing tooth.



Appreciation – Increase in an asset's value.



Arbitration – A process where independent persons, called "arbitrators," reach a decision that is

binding upon disagreeing parties.



Asset – Anything having commercial or exchange value and belonging to a person or organization.



Asset classes – Classes of investments such as stocks, bonds, and money market instruments.



Assignment – Assigning benefits to someone else. Generally, qualified plan benefits cannot be

assigned to someone other than the employee or other participant. Exceptions include pension

benefits affected under a Qualified Domestic Relations Order (QDRO), and some life insurance

plans that allow the participant to assign the life insurance policy to someone else.



Assisted living facility – Shared, supervised residence for those who cannot live independently.



Attained age – A person's age at his or her latest birthday.



Authorization – A health plan’s process for approving payment for medical services covered by an

individual’s benefits plan. Depending on the plan, such authorization may be required before

services are rendered. See “Preauthorization/Precertification.”







B

Balance billing – The practice of charging full fees (over the covered amounts) and then billing the

patient for the part of the bill (the balance) that the plan does not cover.



Bargaining contract – A contract under which all parties set the terms and conditions of the

contract.



Before-tax contributions – Contributions taken from an employee's pay before federal and most

state and local taxes are withheld.



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Before-tax premiums – Premium payments taken from an employee's pay before federal and

most state and local taxes are withheld.



Beneficiary – A person named by the participant to receive insurance or retirement plan benefits

when the participant dies. Also, anyone who may receive benefits under an employee benefit plan.



Benefit duration period – A disability benefit plan may have a maximum length of time during

which benefits will be payable. The benefit duration period begins when the person has become

disabled as defined under the plan and has met any waiting period, and ends when the maximum

length of time to receive benefits is reached.



Benefit maximum – See “Lifetime Maximum.”



Benefit package – All the benefits offered by an employee benefit plan.



Benefits – The specific medical services that are covered by your health plan.



Bereavement leave – Time taken off work due to a death.



Birth control pills and devices – Pills and devices designed to prevent conception of a fetus, or

to prevent implantation of a fertilized egg.



Birthday rule – In plans that follow the birthday rule, if two spouses are each covered by

employer-provided health care plans, the plan covering the spouse whose birthday falls first in the

calendar year pays benefits first (as the "primary plan"), regardless of which spouse is older. If both

spouses have the same birthday, the plan that has covered the person the longest pays first.



Birthing center – Some medical plans cover births at a birthing center, which provides prenatal,

delivery and postpartum care, is staffed by certified nurse-midwives, and meets the plan's – as well

as accreditation and state licensing – requirements.



Bitewing – A dental x-ray to show the teeth in the halves of the upper and lower jaw that are

covered with enamel.



Blood – For medical plans that cover blood, the term may include whole blood, blood plasma and

other blood products.



Bond – An IOU from the issuer that entitles the holder to a specified sum of money, usually at

regular intervals, and repayment of the principal loan amount when the bond matures.



Book value – For most assets, the value at which it is carried on the balance sheet. For a bond,

the value of an original bond investment, plus interest.



Brand-name prescription drug – A drug/medicine that is patented and produced by only one

manufacturer: the pharmaceutical company that first developed it. Because the drug is protected

by a patent, no other company can make the same medicine while the patent lasts. You need a

prescription from your doctor to get a brand-name drug. Check your plan documents to determine

if brand-name drugs are covered under your policy, and, if so, whether they require a higher

copayment or coinsurance.



Break in service – An interruption in employment that affects the employee's benefits.





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Bridgework – Fixed bridgework is a partial denture held in place with crowns or inlays cemented

to natural teeth, and used as an abutment. Fixed-removable bridgework can be removed by the

dentist, but not the patient. Removable bridgework is a partial denture held in place by

attachments, which the patient can remove.



Burial – Interment of physical remains.



Business travel accident insurance – Coverage for an accident that occurs while traveling on

company business.





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Caesarean section – Childbirth by surgical removal of the baby.



Cafeteria plan – An employee benefit plan that gives employees a choice among cash and one or

more qualified benefits, such as health insurance, group term life and dental benefits.



Calendar year deductible – The deductible that applies for a health care plan that counts the

deductible based on a calendar year.



Call to active duty – A summons to active military service.



Capitation – A fixed, prepaid fee paid to physicians who participate in certain managed care plans.

The provider receives this amount as compensation for all services provided to a plan member.



Cardiac/pulmonary treatment – Treatment of illness or injury affecting the heart and lungs.



Caries – Tooth decay.



Carryover deductible – A deductible that applies when a participant is eligible for continuation

coverage under COBRA due to a "qualifying event," such as divorce or termination of employment.

The carryover deductible is the deductible payable under the COBRA continuation coverage, which

includes the part of the deductible satisfied before the qualifying event.



Case management – A process used by health plans to identify members with complex health

care needs and coordinate that care so the member can improve his or her health.



Cash balance plan – See “Account Balance Plan.”



Cash equivalents – Investments, such as money market funds and treasury bills that are of such

high quality and liquidity, they are considered virtually the same as cash.



Cash or deferred arrangement (CODA) – A plan under Section 401(k) of the Internal Revenue

Code that allows employees to choose between receiving compensation, and electing to have that

compensation contributed on their behalf to a qualified plan.



Cash value or cash surrender value – Under group universal life insurance and other whole life

insurance policies, cash value is the amount the insurer would return to the policyholder if the

policy were cancelled. Some policies allow loans against cash values.



Catch-up contributions – For health savings accounts: participants age 55 and older are

permitted contributions to the account that are in excess of the annual contribution limit.

Contributions can be made each year until the participants become enrolled in Medicare. The

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annual catch-up limit for 2011 and beyond is $1,000. For 401(k) plans: Participants age 50 and

over may be allowed to make contributions to the plan that are in excess of the annual contribution

limit, depending on the rules of the plan.



Center of excellence – A facility named as a preferred place to have certain very specialized

services performed, such as organ transplants.



Certificate of coverage – A document you receive after you enroll in a health plan that describes

the specific benefits, limits and exclusions of that plan. Replacement copies can be obtained by

contacting your plan directly, or, in many cases, through your employer.



Certificate of deposit (CD) – An IOU issued by a bank that usually earns interest. It may mature

over a few weeks or many years.



Certified Financial Planner (CFP®) – An individual who assists others in financial planning and

has met the following qualifications from the Certified Financial Planner Board of Standards, Inc.

(CFP Board):



 Successfully completed the CFP Board's certification examination, which tests the

individual's knowledge of key financial planning tools;

 Acquired three to five years of financial planning-related experience before receiving

the CFP certification;

 Agreed to the CFP Board's code of ethics;

 Agreed to complete 30 hours of financial planning continuing education classes

every two years in areas such as estate planning, retirement planning, investment

management, tax planning, employee benefits and insurance.



Charitable deductions – Amounts deducted from a paycheck to contribute to charitable

organizations.



Chemical dependency – Alcoholism and drug dependency as classified by the International

Classification of Diseases of the U.S. Department of Health and Human Services.



Chemotherapy – Treatment of internal disease (primarily cancer) by drugs.



Childbirth – The act of giving birth to a child.



Chiropractor – A Doctor of Chiropractic (D.C.) who performs chiropractic services.



Chiropractic care or services – Services provided by a chiropractor under a system of medicine

based on the theory that disease is caused by malfunction of the nervous system, and that normal

function can be restored by manipulation and other treatment.



Circumcision – Surgery to remove the foreskin of a newborn male.



Civil litigation – A lawsuit in civil, rather than criminal, court.



Claim – For health care plans, a statement of services rendered by a health care provider to a

given patient. The claim is submitted to the plan for payment, usually by your doctor.



Claimant – The person who files a claim for benefits.







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Claims administrator – The company that reviews plan claims and determines whether to pay

them.



Claim form – The form used to file for benefits under a health plan.



Claims procedure – The procedure under the Employee Retirement Income Security Act (ERISA)

of 1974, as amended for filing claims under a qualified plan, and for requesting an appeal of denied

claims.



COBRA (Consolidated Omnibus Budget Reconciliation Act) – A law that lets you continue to

participate in your company’s health plan when you would otherwise lose eligibility because you

lost your job or have a change in family status (typically, divorce). See “Consolidated Omnibus

Budget Reconciliation Act of 1985.”



CODA – See “Cash or Deferred Arrangement.”



Codicil – An amendment to a will.



Coinsurance – A cost-sharing method by which a health insurance plan pays a percentage of the

provider's covered expense (often after a deductible is met) and the participant pays the rest. For

example, the plan may pay 80% and the participant may pay 20%. Coinsurance amounts vary

according to the type of service a patient receives.



COLA – See “Cost of Living Adjustment.”



Collective bargaining agreement or contract – A formal agreement over wages, hours and other

conditions of employment entered into between an employer and one or more employee unions.



Commercial paper – Short-term loans from 2 to 270 days, issued by top-rated organizations and

often backed by bank lines of credit.



Common stock – Units of ownership of publicly traded corporations.



Community leave – Time off from the job to perform community service.



Company match, company matching contributions – See “Match or Matching Contributions.”



Compensation planning services – Services to assist in compensation decisions such as

whether or not to defer compensation.



Compensatory time cashout – Overtime hours that are worked, then converted to paid time off,

then cashed out rather than taken as time off.



Compound interest – Interest earned both on the principal investment and also on the previously-

earned interest.



Conduit IRA – An individual retirement account set up to hold tax-deferred amounts from another

employer's qualified plan.



Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA) – Federal

legislation that governs the offer of temporary continued health care benefits coverage to

participants who otherwise would lose coverage for certain reasons, such as termination of

employment.



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Consumer-directed health plan – Also referred to as “consumer-driven” or “consumer choice”

health plans. A relatively new type of health plan designed to give consumers more control over a

portion of their health benefit dollars, usually through a health fund or account that can be used to

pay for covered medical expenses. Most health funds allow unused dollars to be rolled over from

year to year, for as long as an individual is in the plan, and some plans allow the funds to go with

you, even if you change jobs.



Consumer price index (CPI) – A measure of inflation based on relative prices at various times of

a fixed market basket of goods and services.



Contingent annuitant – A person named to receive annuity benefits if the primary annuitant dies

first.



Contingent beneficiary – The person named to receive death benefits only if no primary

beneficiaries are living when the insured person dies.



Continued employment clause – A provision that requires an employee to remain employed in

order for coverage to continue, or for an employee to be eligible for a contribution.



Contract holder – An employer or individual who purchases a health benefits plan from a health

insurer.



Controlled group company – A company of which the employee's company directly or indirectly

owns 80% or more of the voting stock, or another company that is required to be considered a

controlled group company under the Internal Revenue Code of 1986, as amended.



Conversion option – An option that allows an individual who is leaving an employee health

benefits plan to purchase individual coverage at a pre-determined rate. This is often an option to

COBRA continuation. Conversion is only available under certain plans.



Conversion privileges – A privilege given to a plan participant to convert group insurance to an

individual insurance policy, without evidence of insurability, upon termination of employment.



Coordination of benefits (COB) – When an individual is covered under more than one health

benefits plan (this is common when your spouse has a separate health plan), coverage is

“coordinated” to avoid duplicate payments. Rules establish which plan will pay benefits first and

allow for sharing of claims information between plans.



Copayment – A specified dollar amount or percentage a participant is required to contribute

toward the cost of covered medical services under a health plan. Like coinsurance, copayments

generally are applied after plan deductibles have been met. Copayments may vary according to

the service provided.



Cost of living adjustment (COLA) – An across-the-board change in wages or pension benefits to

reflect the rise or fall in the cost of living as measured by an index such as the Consumer Price

Index (CPI).



Cost-saving features – Features that reduce costs.



Covered dependent – A person other than the employee who is covered under an employee's

health care plan.







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Covered health care expense (also “Eligible Expense”) – Medically necessary health care

services that are “covered” by your health plan or that are “eligible” to be paid by your health plan.

In other words, an expense that meets all the rules to be covered by a health plan.



Covered person – A person who is covered under a plan.



Covered provider – A service provider eligible to provide covered health-related services, and

receive payment under a health plan.



Credentialing – A system for assessing the professional/clinical qualifications and record of a

physician, health professional or health facility. This includes a review of relevant training,

academic background, experience, licensure, and board certification and/or accreditation to

provide certain types of medical services. Most health plans credential physicians and facilities

before adding them to their list of participating providers and periodically re-credential these

providers while they remain in the network.



Credit rating – The result of a formal investigation into a person's or corporation's credit history,

creditworthiness and ability to repay debts.



Credit union – A not-for-profit financial institution formed to serve members of a group.



Cremation – The process by which physical remains are converted to ash for dispersal or burial.



Critical care – Health care provided to acutely ill patients during a medical crisis, such as in an

intensive care unit or coronary care unit.



Crown – The part of a tooth covered by enamel.



Custodial care – Services rendered to safely and reasonably attend to an individual’s daily living

activities by a person without special medical skills. Examples include assistance in walking,

bathing, dressing and feeding. Coverage for custodial care is NOT included in most basic health

benefits plans, including Medicare.



Customary and reasonable – Usually referred to as “usual, customary and reasonable” or UCR.

See “Reasonable and Customary Charge.”





D

Daily benefit – The maximum amount of money a participant will be paid for each day covered

services are received.



Death benefit – The payment made to beneficiaries upon the death of the participant.



Debenture – A bond secured only by the issuer's promise (not backed by specific collateral).



Debt collection defense – Legal services provided to a legal services plan participant to help deal

with the claims of creditors.



Deductible – The amount of eligible expenses the participant is required to pay each year before a

health plan begins to pay benefits for covered expenses. This is a fixed dollar amount set by your

health care plan.







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Deductible carryover – A feature under some health care plans where covered charges incurred

near the end of a year (such as in the last three months) may be carried over to be counted toward

the next year's deductible.



Deferred compensation – Compensation an employee elects to have contributed to a deferred

compensation plan rather than receiving it as pay. Such a plan typically defers income tax on the

deferred compensation until the employee withdraws it from the plan.



Defined benefit plan – A plan that is not an "individual account plan" under the law. A defined

benefit plan has a definite formula by which the employee's benefits will be determined. In plans of

this type, employer contributions are determined by actuaries.



Defined contribution plan (individual account plan) – A pension, health or other benefits plan

typically provided by an employer under which the employer gives each employee a fixed amount

of money or “contribution.” When provided for health benefits, this amount can be used either to

purchase health insurance or to pay directly for the cost of health services.



Denied claim – A claim sent by your doctor to your health plan that your health plan does not pay

because of the rules of your plan.



Dental hygienist – A person trained and licensed to remove deposits from teeth, and to provide

other services under the direction of a dentist.



Dental plan – A plan designed to help participants with the cost of covered dental services.



Dental services due to accident – Dental services performed due to an accident that injures

teeth or their structures.



Dentist – A person licensed to practice dentistry. The term may also mean a physician who is

authorized to perform a given dental service.



Denture – A device to replace missing teeth.



Department of Labor (DOL) – The department that administers the administrative and regulatory

portions of ERISA.



Dependent – A person who can be covered by your health plan because of his or her relationship

to you (usually a child or spouse). Remember: your child may no longer be covered under your

health plan when he or she reaches a certain age.



Dependent Care Flexible Spending Account (Dependent Care FSA) – An employer plan that

allows employees to set aside pre-tax contributions from their paychecks to pay for eligible

childcare expenses. Because the reimbursement account contributions are not taxed, you

decrease your taxable income while increasing your available cash. Funds do not roll over from

year to year, are not portable, and do not accrue interest.



Dependent life insurance – Insurance covering the life of an eligible dependent, such as a

spouse or child.



Diagnostic services – Services to determine the presence, cause or nature of a disease.



Direct access (Also “Open Access”) – Health plans in which you can go directly to any

participating provider in the plan’s network without a referral from a primary care physician.



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Direct roll-in – An amount the employee has transferred directly to the current company's

retirement plan from a former employer's qualified plan or from a conduit IRA. A direct roll-in

contribution generally does not require tax withholding.



Direct rollover – A payout of tax-deferred retirement plan money directly from the trustee of a

qualified plan to the trustee of another qualified plan or an individual retirement account. A direct

rollover does not incur taxes or penalties.



Disability – A condition that makes an employee incapable of performing some or all of the duties

of his or her job. Plan definitions of disability vary.



Disability insurance – Insurance against income lost due to the participant becoming disabled as

defined by the plan.



Disease management – A program that identifies individuals with a specific illness or disease

(usually chronic in nature) and uses an integrated health care approach to help prevent recurrence

of symptoms, maintain a high quality of life, and prevent future need for medical care. Individuals

enrolled in a disease management program may receive educational information, supplies and

follow-up contact with medical professionals to help them manage their illness.



Dismemberment – The loss, or loss of use of, a limb or function, such as vision.



Diversification – Dividing assets among several different investment types in an effort to reduce

risk.



Dividends – Earnings distributed to shareholders.



DOL – See “Department of Labor.”



Domestic partner, domestic partnership dependent – A person who is unrelated to the

employee by blood or marriage, and is not legally married to the employee. Plans that provide

coverage for domestic partners generally require certification of the partner.



Drug formulary – See “Formulary.”



Drug utilization review (DUR) – A system that reviews prescriptions to identify potential

interactions with other drugs, and proposes alternative treatments.



Duplicate coverage – When you or one of your dependents has coverage for the same health

care service with more than one health benefits plan.



Durable medical equipment – Medical supplies and equipment that are not disposable, such as

wheelchairs, home hospital beds and kidney dialysis equipment. Such equipment is used

repeatedly, and primarily serves a medical purpose, is appropriate for use at home, and is

generally not useful to a person without an illness or injury.





E

EAP – See “Employee Assistance Plan.”



Early distribution – A distribution taken from a pension plan before the participant reaches age

59-1/2, assuming the participant has not died or become disabled. Early distributions are generally

subject to a 10% penalty tax.



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Early retirement – When a participant retires after becoming eligible for a pension benefit but

before reaching normal retirement date. Generally, the early retirement pension is a reduced

percentage of the normal retirement pension.



Early retirement date – The earliest date a retirement plan participant may begin to receive

benefits.



Educational assistance program – A plan that allows employers to provide employees with tax-

free assistance for eligible education expenses.



Effective date – The date health care coverage or plan participation begins. Look for it on your ID

card.



Elapsed time method – A way of counting a participant's service that involves subtracting the hire

date from the termination date.



Elder care – Support for plan participants and their disabled or elderly relatives. This can include

referral services and adult day care.



Elective care – Care that can be postponed for the number of days defined by the health care plan

without undue risk to the patient.



Eligibility period – The period of time during which eligible participants can enroll in a plan,

without providing evidence of insurability.



Eligible adoption leave – Time off due to adoption or placement of a child for adoption.



Eligible compensation – The part of an employee's pay used to determine a pay-based benefit.



Eligible dependent – A person other than the employee who is eligible to be covered under an

employee's health care plan.



Eligible employee – An employee who is eligible to be covered under a health plan.



Eligible expenses – Expenses that meet all requirements to be covered under a health plan.



Eligible rollover distribution – The part of a retirement plan payment that can be rolled over to an

individual retirement account or to another qualified plan that accepts rollovers. This does not

include dividends from an Employee Stock Ownership Plan, or after-tax contributions to a 401(k)

plan.



Elimination period (waiting period) – The period of time an eligible participant must complete

before being eligible to be covered under a plan. For a disability benefit, this is the period of time

the person must be disabled as defined by the plan before disability benefits begin.



Emergency – A serious illness, injury or health issue that arises suddenly and requires immediate

medical attention to avoid loss of life, serious health risk or permanent disability.



Emergency and short term child care services – Employer-supported services designed to

provide temporary care for a child when the child's regular caregiver becomes unavailable.



Emergency care – Care in an emergency as defined under a health care plan. The plan's rules for

preauthorizing care or for using network providers may be less strict in an emergency.

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Characteristics of an emergency often include sudden onset and symptoms severe enough that

the lack of immediate medical attention could seriously harm the patient or cause severe pain.

Mental health and chemical dependency plans often include potential harm to the patient or others

in the definition of an emergency.



Emergency medical evacuation – Emergency removal of a patient from one place to another for

treatment (such as by helicopter) when either the patient's condition or the patient's location or

situation do not permit timely transport by ambulance.



Emergency room – A hospital area equipped and staffed for the prompt treatment of acute illness,

trauma, and other medical emergencies.



Employee Assistance Plan (EAP) – An employment-based plan designed to help employees

cope with issues such as work/life balance, stress, family violence and grief. Such programs offer

access to professional counselors who provide confidential assessment and short-term counseling

to employees and their families. Many plans offer counseling assistance by telephone, with 24-

hour phone access, and may also cover follow-up visits with counselors, if needed.



Employee Retirement Income Security Act of 1974 (ERISA) – A federal statute that regulates

employer-based health, pension and other benefit plans in the U.S.



Employee Stock Ownership Plan (ESOP) – A type of plan that encourages employees to own

employer stock by distributing benefits in shares of stock.



Endodontic therapy (root canal) – Treatment of a tooth with damaged pulp. This may involve

removing the pulp, sterilizing the pulp chamber and root canals, and filling those spaces.



End stage renal disease – The stage of kidney dysfunction that is nearly always permanent, in

which the patient needs dialysis or a kidney transplant to survive.



Enrollee – A subscriber or dependent covered under a health plan, sometimes referred to as a

“member.”



EOB – See “Explanation of Benefits.”



EOI – See “Evidence of Insurability.”



Equities – Ownership of property, usually stock.



ERISA – See “Employee Retirement Income Security Act of 1974.”



ESOP – See “Employee Stock Ownership Plan.”



Estate planning – Financial planning services to help participants plan for the transfer of their

assets after their deaths. Goals may include reducing estate taxes and providing for the

participant's wishes.



Eviction defense – Legal services to help participants defend against being evicted from their

homes.



Evidence of insurability (EOI) – Proof of health, employment or other factor required before

beginning or increasing insurance amounts.





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Exclusion – A condition, circumstance or service that is not covered by your health plan.



Exclusion allowance – A way to calculate how much compensation a participant can exclude

from income and contribute to a tax-sheltered annuity.



Executive retirement planning – Retirement planning services for executives. May involve

planning to accumulate assets for retirement or to time a retirement plan distribution.



Exercise period – For stock options, the exercise period refers to the period of time during which

the owner of the options can use those options.



Exercise price – For stock options, the price at which the holder has the right to convert the

options to stock.



Exercise programs – Fitness programs, generally for improvement of health.



Experimental services or procedures – Also called “investigational.” Health care services,

treatments, drug therapies and supplies not yet determined to be effective and safe by applicable

government agencies in treating the illness or injury for which their use is proposed.



Explanation of benefits (EOB) – After a claim is filed with a health care company, the health care

company sends a brief report to the participant showing payment information for each service or

supply received under the plan – and for which your doctor billed your health plan. EOBs are

sometimes mailed and are often now available through the Internet.



Extended care facility – An institution other than a hospital that provides inpatient medical

services. Such a facility provides medical treatment and is not primarily for custodial care.



Eye exams – Examinations to diagnose vision problems and determine a corrective prescription.

May also include health screening for conditions such as glaucoma.



Eyeglasses – Lenses in frames for vision correction.





F

Fair market value – Price at which an asset or service changes hands, assuming an informed

buyer and seller.



Family deductible – A deductible met by the combined expenses of all covered family members.



Family Medical Leave Act of 1993 (FMLA) – A law that requires companies with more than 50

employees to provide up to 12 weeks of unpaid, job-protected leave for eligible employees who

meet the service requirements and request leave for:

▪ Birth and care of a newborn baby;

▪ Adoption or foster care placement;

▪ Care for an immediate family member (spouse, child or parent) with a serious health

condition;

▪ Medical leave when you are unable to work because of a serious health condition.



To qualify for this benefit, you must have worked at your company for at least 1,250 hours in the

preceding 12 months before you begin your leave.







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Federal Employees Health Benefits Program (FEHBP) – The health benefits program under

which most Federal government employees are covered.



Fee for service – A reimbursement system process that allows health plans to pay doctors and

other providers a fee for each service they provide.



Fertility programs – Treatment designed to increase the ability to conceive a baby, or to induce

conception.



First dollar plan – A term applied generically to a health benefits plan that does not have a

deductible. It can also describe a plan that does have a deductible, but also incorporates a benefits

“fund” or account that can be used to pay for medical services before the deductible is met. Unlike

an HRA or HSA, the fund benefit incorporated into these first dollar plans generally does not roll

over from one year to the next.



Fiscal year – A corporation's accounting year, which may or may not be a calendar year.



Fixed bridge – A device to replace a missing tooth or teeth that is cemented in the mouth. A fixed

bridge is made up of one or more pontics held by one or more retainers attached to the abutment

teeth.



Fixed income – Steady income such as that from bonds, fixed annuities or preferred stock.



Fixed match or fixed matching contributions – The fixed amount a company contributes to the

employee's 401(k) account, based on the employee's matched contributions.



Flexible benefit plan – A plan under Section 125 of the Internal Revenue Code that gives

employees a choice between taxable benefits, including cash, and nontaxable benefit programs.

Employees typically have a say in the election of benefits, and may be able to add employee

contributions for increased benefits.



Flexible Spending Account (FSA) – A tax-advantaged account established in connection with an

employer-sponsored benefits plan that can be used to pay for medical expenses. Contributions to

the FSA are typically made by the employee. The contributions are free of federal, Social Security

and most state taxes. Funds must be used in the year they are accrued; unused funds revert to the

employer. Funds are not portable and do not accrue interest.



Fluoride – A fluoride solution applied to teeth to prevent dental decay.



FMLA – See “Family Medical Leave Act of 1993.”



Foreign affiliate – An entity in which an employee's company has a direct or indirect ownership of

at least 10% and has entered into a 3121(l) agreement under the Internal Revenue Code.



Foreign (or international) fund – An investment fund that invests only in non-U.S. securities.

Compare this to a global fund, which invests in both U.S. and foreign securities.



Forfeiture – An amount an employee loses by terminating employment before becoming fully

vested under the plan's vesting schedule. In flexible spending accounts, the amount an employee

loses if any money remains in the account after the claims filing deadline.



Formulary – A list from your health plan of prescription drugs that are approved for use in specific

treatments, and dispensed through network pharmacies to plan members at the highest benefit

level. The list is established by a health plan with the assistance of its Pharmacy and Therapeutics

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Committee, and generally includes brand-name and generic prescription drugs. Within each

category of covered drugs, plans may provide different levels of coverage, based on the drug’s

cost, efficacy or other considerations. Or the cost may not be covered at all. Formularies are

subject to periodic review and modification by a health plan.



FSA – See “Flexible Spending Account.”



Fully insured employer – An employer that pays a premium to a health plan provider to provide

and administer benefits plans for its employees is said to be “fully insured.” This means the insurer,

not the employer, is liable for the cost of medical claims.





G

Generic prescription drug – A drug that does not have the trademark of the original

manufacturer, but contains the same active ingredients and is identical in dose, form and

administrative method to a brand-name drug. Generics cost less than the brand-name version,

since the manufacturer doesn’t have to pay to develop or market the drug.



Global fund – An investment fund that invests in both U.S. and foreign securities. Compare this to

a foreign fund, which invests only in non-U.S. securities.



Grandfathered provisions – When a company changes a benefit plan, participants who were

active participants in the plan before the change may remain covered under some provisions of the

old plan, or may be given an option between the old provisions and the new provisions. The

provisions of the old plan that carry forward for such participants are grandfathered provisions.



Grant – A grant generally refers to a grant of employer stock, or of options to purchase employer

stock.



Group coverage – Plans supported by an employer or employee organization that provide health

coverage to employees, as well as former employees and their families. Professional and alumni

associations, such as local Chambers of Commerce, may also offer group health plans.



Group homes – Living places that provide an environment for mental health and chemical

dependency treatment, and help the residents ease their way into regular activities of daily living.



Group universal life plan (GULP) – Group life insurance that combines two features: death

benefit protection for named beneficiaries through term insurance, and an investment element that

can create permanent insurance or accumulate money tax-deferred. Participation is voluntary and

the employee pays the full cost.



Guaranteed issue amount – The amount of life insurance an individual can purchase for which no

medical examination or health history is required.





H

Halfway houses – Living places that provide an environment for mental health and chemical

dependency treatment, and help the residents ease their way into regular activities of daily living.



Hardship withdrawal – A withdrawal of employee contributions from a 401(k) plan before the

participant retires at age 55 or reaches age 59-1/2 and after meeting the plan's tests for financial

hardship. Such a withdrawal is subject to ordinary income tax and a 10% penalty tax.



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HCE – See “Highly Compensated Employee.”



HDHP – See “High Deductible Health Plan.”



Health benefits plan – A plan purchased by an individual or provided through an employer that

provides payment for health care services. Some plans are limited to particular types of services,

such as hospitalization or dental care; others provide comprehensive benefits subject to certain

exclusions and limitations. The terms of a health benefits plan are described in a plan document.



Health care consumerism – A movement that encourages individuals to become more involved

in, and take more responsibility for, making smart health care decisions, managing their health

benefits dollars, and maintaining their overall health status.



Health Care Flexible Spending Account (Health Care FSA) – An account an employee may

establish to set aside before-tax contributions from each paycheck to pay eligible health care

expenses.



Health fund – A term applied to both Health Reimbursement Arrangements (HRAs) and Health

Savings Accounts (HSAs) to describe a benefits account that can be used to pay for health care

expenses.



Health Insurance Portability and Accountability Act of 1996 (HIPAA) – A federal law enacted

in 1996 that is designed to improve availability, portability and efficiency of health coverage by:

▪ Limiting exclusions for pre-existing conditions;

▪ Providing credit for prior health coverage;

▪ Allowing transmission of coverage information (i.e. covered family members and coverage

period) to a new insurer;

▪ Providing new rights to allow an individual to enroll for health coverage when he or she

loses coverage or has a new dependent;

▪ Prohibiting discrimination in enrollment/premiums;

▪ Guaranteeing availability of health insurance coverage to all employers, regardless of

size;

▪ Providing certain tax incentives.



HIPAA’s Administrative Simplification and Privacy (AS&P) rules seek to standardize the electronic

exchange of health information and protect the security and privacy of consumer-identifiable health

information.



Health Maintenance Organization (HMO) – A form of health benefits plan that provides or

arranges for health services required by its members. In a traditional HMO plan, non-emergency

services must be received from a network of health care providers, although certain HMO plans

may offer reduced benefits for care received outside of the network. In most HMO plans, members

are required to select a primary care physician (PCP) from the network to provide routine care and

make referrals for in-network specialty and hospital services when appropriate.



Health Reimbursement Arrangement (HRA) – An HRA is a fund that an employer sets up for its

employees, which is used to reimburse employees for eligible health care expenses not covered by

the employer’s health plan. HRAs may be designed to cover any or all of the following expenses:

coinsurance, copayments, deductibles, dental and vision charges, and premiums for health and

long-term care insurance coverage. Funds may also be rolled over from one year to the next,

depending on plan design.



Health risk assessment – A form or online tool that is filled out by an individual and used to

assess the individual’s current health status, as well as risk factors for future illness.

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Health Savings Account (HSA) – An HSA is a tax-advantaged savings account that an individual

can establish to reimburse that individual for eligible health care expenses not covered by his or

her health plan, or to save for future health care expenses. Expenses that can be reimbursed are

those considered "qualified" by the IRS and include: coinsurance, copayments, deductibles, and

dental and vision charges. In order to establish an HSA, an individual must be enrolled in a high

deductible health plan and not be eligible for coverage under any other health plan. Once the

individual’s expenses meet the plan deductible, the remaining eligible expenses are covered by the

high deductible health plan according to its rules. Contributions to the HSA can be made by the

employer, the employee, or both. The accounts are portable, meaning you can take them with you

when you leave your employer. Balances roll over from year to year and accrue interest. In

addition to covering qualified medical expenses, HSA funds can be withdrawn in cash, although

cash withdrawals become taxable and may be subject to an additional withdrawal penalty.



Hearing therapy/hearing aids – Treatment or equipment to improve hearing.



High Deductible Health Plan (HDHP) – A plan with a large deductible, typically at least $2,000 for

family coverage; these minimums are adjusted annually for the cost of living. Such plans are

designed to treat extraordinary medical expenses, rather than everyday expenses, and premiums

are often lower than for other health plans. An individual must be enrolled in a high deductible

health plan in order to establish an HSA.



Highly compensated employee (HCE) – An employee who earns more than a specific dollar

amount established by the IRS. This dollar amount is adjusted from time to time for cost of living

changes.



HIPAA – See “Health Insurance Portability and Accountability Act.”



HMO – See “Health Maintenance Organization.”



Home health care – Skilled nursing or other therapeutic service provided in a home setting. Often,

home health care is covered as an alternative to follow-up hospitalization or nursing home care.

Some medical plans cover home health care that meets certain requirements. For example, such

care may require precertification and/or a written treatment plan, and may require care to be

provided by persons meeting certain requirements.



Home health care agency – An agency licensed by the state and accredited to provide services,

such as skilled nursing during visits to the patient's home.



Homeowner insurance – Insurance on the value of the home and its contents.



Hospice – A facility licensed by the state to care for terminally ill patients. Such facilities provide

supportive care at the end of life for individuals with terminal illnesses (such as cancer or AIDS).



Hospital – An organization licensed by the state to provide inpatient and outpatient care for

diagnosis and treatment of illness and injury. It is not primarily for rest or custodial care.



Hospital precertification or pre-registration – Some health plans require advance authorization

before the plan will pay for certain medical services, such as hospitalization.



Hours of service – Hours for which the employee is paid, or entitled to be paid, by the company.



HRA – See “Health Reimbursement Arrangement.”



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HSA – See “Health Savings Account.”





I

ID card – The identification card carried by a subscriber or dependent that provides important

information relating to health coverage, such as the plan effective date, copayments, etc. The card

usually lists a toll-free number that patients or health care professionals may call for assistance

with benefits.



Identity disorder – Generally refers to a confusion of gender identity, where a person confuses

the sense of being male and masculine or female and feminine.



Immunizations – The process of making a person immune to a disease, generally by injection.



Impression – A negative reproduction of a given area. For example, an impression may be taken

of a tooth in order to make an inlay or crown for that tooth.



Indemnity plans – Also called “traditional plans,” these are group health insurance plans that

allow individuals to secure medical care from any licensed provider at the same level of benefits

(the plan has no network of health care professionals). Generally, the participant pays the full cost

of services until a deductible is met, then the participant and the plan share the costs. Indemnity

plans often incorporate coinsurance, and benefit and lifetime maximums.



Independent Practice Association (IPA) – A group of physicians or other providers that contract

with a health benefits plan to provide services. Often, individuals select a physician in an

independent practice association as their primary care physician (PCP). When appropriate, the

PCP refers the patient to specialists and hospitals affiliated with the IPA, unless his or her medical

needs extend beyond the capability of these providers.



Index fund – An investment fund that holds investments that mirror the investments tracked by a

major index, such as the Standard and Poor's 500.



Individual deductible – The deductible that must be met by an individual participant.



Individual policy – Health coverage for individuals (and their families), who are either self-

employed or who are not offered health coverage through an employer or other group plan.



Individual Retirement Account (IRA) – An account that allows individuals to set aside money for

retirement. Income limits, and whether they are covered under another qualified retirement plan,

determine whether contributions can be made pre-tax. Investment return is tax deferred until

withdrawal. Ordinary income tax must be paid upon withdrawal, as well as a 10% penalty tax on

amounts withdrawn before age 59-1/2.



Individual underwriting – A process of determining an applicant's individual eligibility for

insurance. This differs from group underwriting, where newly eligible plan participants generally are

not reviewed on an individual basis for insurability.



Infant age increase schedule – Some dependent life insurance programs increase the insurance

coverage amount for infants at different ages. For example, one coverage amount may be

available from birth to two days, another until the end of two weeks, and another beyond age two.



Inflation protection – A feature to adjust benefits to reflect changes in the cost of living as

measured by an index.



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Informal care – In a long-term care plan, informal care is generally assistance with basic living

needs that does not need to be provided by a specially trained person or in a formal setting.



Inlay – A restoration made to fit a prepared tooth cavity and then cemented into place.



In network – Refers to care received from providers who participate in a health benefits plan’s

provider network, or network of participating physicians, hospitals and health care professionals.

Many health plans provide a higher level of coverage for doctors in their network. Some plans

provide coverage only for emergency services received from providers not in their network.



Inpatient – A patient confined in a hospital or other health care facility as a registered bed patient

for the number of hours defined by the plan, and who incurs room and board charges.



Inpatient care – Health care service provided after a patient is admitted to the hospital.



Inpatient facility – A facility (such as a hospital) that provides inpatient care.



Inpatient surgery – Surgery performed while a person is an inpatient in a hospital (a registered

bed patient incurring room and board charges).



In-service withdrawal – A withdrawal from a plan account while the employee is working for the

company.



Integration with Social Security – A plan where the benefits are integrated with the Social

Security benefit. With an integrated plan, employees earning more than the Social Security taxable

wage base receive greater contributions to reflect the fact that Social Security benefits are not

provided based on pay over that amount.



Interactive voice response – An interactive phone system that provides benefit information

and/or accepts transactions.



Intermediate care – For a long-term care program, the level of care that lies between the skilled

care that would be provided in a hospital or skilled nursing facility, and purely custodial care.



Intermittent leave – A form of leave under the Family Medical Leave Act taken in separate blocks

of time (not as one continuous leave of absence).



International fund – An investment fund with at least two-thirds of its assets invested in equities of

companies outside the U.S.



Intestate – A person dies intestate when he or she dies without a will.



Investigational services – See “Experimental Services/Procedures.”



Investment management services – Services to allocate assets among various available

investments.



IRA – See “Individual Retirement Account.”



IVR – See “Interactive Voice Response.”







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J

Joint and 50% survivor annuity – The automatic payment method under some retirement plans if

the employee is legally married when benefit payments begin. It provides the employee with

monthly payments for life, reduced based on the ages of both the employee and the spouse when

payments begin. If the employee dies before the spouse, the employee benefits will stop and the

spouse will receive 50% of the reduced payments for life.



Joint and 100% survivor annuity – The automatic payment method under some retirement plans

if the employee is legally married when benefit payments begin. It provides the employee with

monthly payments for life, reduced based on the ages of both the employee and the spouse when

payments begin. If the employee dies before the spouse, the employee benefits will stop and the

spouse will receive 100% of the reduced payments for life.



Junk bond – Bond with a credit rating of BB or lower by key credit agencies.



Jury duty – Time off from work when called to serve on a jury.





K

Keogh (HR-10) plan – A pre-tax retirement savings program for small-business owners and self-

employed people. Keogh plan participants postpone tax on both contributions and earnings while

their money remains in the plan.



Kidney disease, end-stage – Failure of the kidneys. A person with end-stage kidney disease

qualifies for Medicare before reaching the usual Medicare eligibility age of 65. A Medicare-eligible

participant should review how Medicare works with any employer-sponsored health care coverage.





L

Lawful spouse – A person recognized as the lawful husband or lawful wife of an active employee

under the laws of the state or jurisdiction where the employee lives.



Leave year – The twelve-month period a company uses for measuring leave taken under the

Family Medical Leave Act.



Length of stay – The number of consecutive days a patient is hospitalized.



Liability insurance – Insurance that pays benefits to an injured party on behalf of a covered party

that is legally responsible for the harm to that person or property.



Lifetime maximum – A limit on the number of visits your health plan will cover for a treatment or

therapy, or a dollar limit on the amount of coverage the plan will allow in your lifetime. For example,

a plan may limit the total number of days of occupational therapy an individual may receive to 60,

or have a maximum dollar amount of coverage for that service over a lifetime.



Limit – Provision in a group benefits plan that limits coverage in certain situations. Your plan will

specify a minimum, maximum, or other limitation.



Limitation – See “Limit.”



Living needs benefits or living benefits – A life insurance plan that may give policyholders

access to part or all of their insurance benefit while still living, such as if they become terminally ill.



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Living trust – A trust established while the donor of the trust assets is alive (as opposed to a

testamentary trust that is established at death).



Living will – A document that instructs doctors on wishes about issues such as use of life support

systems and pain relieving medication for a person who has a terminal condition. See “Advance

Directive.”



Loan – An amount borrowed under plan rules.



Long-term care – A variety of personal care services designed to help people with prolonged or

chronic physical illnesses, disabilities or cognitive impairment (such as Alzheimer’s disease). Long-

term care services help people overcome limitations that keep them from being independent by

providing ongoing assistance with day-to-day activities like bathing, dressing and eating. Long-term

care services include care provided at home or in the community, including home health care and

adult day care, as well as through assisted living facilities, nursing homes or other types of

facilities.



Long-term care insurance – Coverage to pay part or all of long-term care costs.



Long-term disability – A significant period of disability as defined by a long-term disability plan.



Long-term disability (LTD) plan – A plan designed to provide disability benefits to an employee

after the employee meets the plan's disability requirements and waiting period, until the employee

is no longer disabled or reaches the age limit for benefits.



Loss of a body part or function – A loss as defined by an accident plan. For example, for the

plan to pay upon "loss of a hand," the plan may require that the hand be completely severed at or

above the wrist joint.



LTD plan – See “Long-term Disability (LTD) Plan.”



Lump-sum distribution – Payment of an employee's entire vested benefit from a retirement plan

after leaving the company in a single sum. Depending on the type of plan, this may be the vested

account balance or the present value of a future vested benefit. Not all plans allow a lump-sum

benefit at termination.





M

Mail-order pharmacy/drug program – A service that lets you fill/order prescriptions by mail

through a mail-order pharmacy. Since mail-order distributors can purchase drugs in larger volumes

than retail outlets, the cost charged to patients is often substantially lower, especially for long-term

therapy, such as blood pressure medication. For convenience, your order is sent directly to your

home.



Maintenance medication – Drugs that are prescribed for the long-term treatment of chronic

illnesses, such as diabetes or high blood pressure.



Malocclusion – An abnormal relation to the opposing teeth (sometimes also called "bite").



Malposition – Faulty position of teeth.



Managed care – Any form of health benefits plan that actively monitors health care services

received by covered individuals for effectiveness, cost efficiency and/or quality. Typical managed

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care plans provide cost containment through various means, including coordination of care through

primary providers, use of provider networks, utilization review and preauthorization of services.



Mandated benefits – Benefits that health care plans are required by state or federal law to

provide.



Match or matching contributions – The amount a company contributes to the employee's 401(k)

account based on the employee's matched contributions.



Matched contributions – Contributions an employee makes to a 401(k) plan that are eligible for

matching contributions by the company.



Maternity – Motherhood.



Maternity care – Maternity care may include prenatal care (exams during pregnancy), childbirth,

certain routine nursery care for a newborn, and postpartum care.



Maximum annual benefit – The maximum dollar amount of benefits a health plan will pay for a

given person in a year.



Maximum lifetime benefit – The maximum dollar amount of health care benefits that will be paid

for a given person under a plan.



Medical certification – The documentation that may be required when an employee requests a

leave under the Family Medical Leave Act for medical reasons.



Medical Savings Account (MSA or Archer MSA) – MSAs were tax-advantaged health savings

accounts for individuals who are either employed by a small employer (fewer than 50 employees)

or are self-employed. The MSA program was discontinued in 2003 with the authorization of Health

Savings Accounts, which operate in a similar manner.



Medicaid – A state government program that provides health care insurance for low income

individuals, including families and children.



Medically necessary – Medical care or supplies that your health plan agrees you need to treat an

illness or injury. Your health plan’s decision on what is medically necessary is based on the results

of clinical research or accepted medical standards regarding what is appropriate for treatment.

Experimental and investigational services, therapies and drugs are generally not included in this

definition.



Medicare – A federal plan administered by the Social Security Administration that provides health

care insurance to people aged 65 years or older, as well as certain disabled individuals. Medicare

Part A provides benefits for hospital services and is provided to all eligible individuals without a

required contribution. Medicare Part B covers physician and other outpatient services and is

voluntary; eligible individuals are required to contribute to Part B coverage.



Medicare Advantage – A health benefits plan provided by a carrier as an alternative to traditional

Medicare Part A and Part B coverage. Medicare Advantage plans may provide additional benefits

and/or different levels of coverage and may have different required contributions compared to

traditional Medicare coverage.



Medicare Advantage Plan (also called Medicare Part C) – A Medicare program that gives you

more choices among health plans and extends benefits beyond the Original Medicare Plan. It



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includes private Medicare Advantage plans (such as HMOs and PPOs) that provide Part A and B

benefits to enrollees, as well as Medicare prescription drug benefits beginning in 2006. Nearly

everyone with Medicare Parts A and B is eligible for a Medicare Advantage plan. Medicare

Advantage plans previously were called Medicare+Choice plans.



Medicare Part A – A government supported health insurance plan that helps cover inpatient

hospital care, care in nursing homes, hospice care and some home health care for qualified

Americans age 65 and older and certain younger individuals with disabilities. Most people pay for

Part A coverage through taxes while working and, therefore, do not pay a deductible or monthly

premium.



Medicare Part B – A government supported health insurance plan that covers doctors' services,

outpatient hospital care, medical equipment, physical and occupational therapy and some home

health care for qualified Americans age 65 and older and certain younger individuals with

disabilities. Most people pay an annual deductible and a monthly premium for this health plan.



Medicare Part C (also called Medicare Advantage Plan) – A Medicare program that gives you

more choices among health plans and extends benefits beyond the Original Medicare Plan. It

includes private Medicare Advantage plans (such as HMOs and PPOs) that provide Part A and B

benefits to enrollees, as well as Medicare prescription drug benefits beginning in 2006. Nearly

everyone with Medicare Parts A and B is eligible for a Medicare Advantage plan. Medicare

Advantage plans previously were called Medicare+Choice plans.



Medicare Part D – A government supported health insurance plan that helps cover prescription

drug costs for qualified individuals who are entitled to Medicare Part A and/or B. As of January 1,

2006, private health insurance companies have offered these plans to Medicare recipients.



Medicare prescription drug coverage – Sometimes called Medicare Part D coverage, a plan of

benefits provided under the Medicare program that contributes to the cost of prescription drugs.



Medigap – Insurance that supplements the reimbursement provided by Medicare for medical

services. Medigap plans often pay for certain classes of services not covered by traditional

Medicare coverage, and may also pay for co-insurance or other amounts seniors are required to

contribute to their Medicare coverage.



Mental and nervous disorders – See “Mental Illness.”



Mental health and chemical dependency professionals – Caregivers with the education,

certification and licensing required by the mental health and chemical dependency plan.



Mental illness – A condition meeting the plan's definition of mental illness. This may include

reference to the International Classification of Diseases by the U.S. Department of Health and

Human Services, or to generally accepted standards.



Money market – The general market for short-term debt instruments including commercial paper,

Treasury bills and CDs. A money market fund invests in these instruments.



Money purchase plan – A type of individual account plan in which the employer's contributions

are made for specific individuals as defined by the plan (usually as a percentage of pay). Benefits

are determined based on the amount that can be purchased with the money in the participant's

account from contributions and investment return.



Morbid obesity – Obesity that has become a direct and immediate threat to a person's life.



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Mutual fund – A fund created by an investment company by raising money from shareholders and

investing it in an effort to meet the fund's objectives. Mutual funds generally offer greater

diversification, lower risk, and lower management fees for a given amount invested than investing

the same amount in a single stock or bond.





N

National Committee for Quality Assurance (NCQA) – NCQA is an independent, not-for-profit

organization that evaluates managed care plans. The NCQA accreditation process is nationally

recognized and evaluates how well a health plan manages all aspects of its system and the extent

to which it helps to continuously improve health care for individuals.



Negotiated fees – The fees negotiated between a network and its providers. Generally, the

providers agree to accept fees lower than those typically charged by doctors and hospitals.



Network – Also called "provider network." A panel of physicians, hospitals and other health care

professionals who contract with a health benefits plan to provide services, typically at a negotiated

rate of payment. With certain plans, an individual must access care from a network provider in

order to receive the maximum level of benefits.



No-load fund – A mutual fund that charges no sales charge to its shareholders.



Non-assignability – Generally, qualified plan benefits cannot be assigned to someone other than

the employee or other participant. Exceptions include pension benefits affected under a Qualified

Domestic Relations Order (QDRO), and some life insurance plans that allow the participant to

assign the life insurance policy to someone else.



Nonformulary – Drugs that do not appear on the plan's formulary list.



Non-participating provider – This term is generally used to mean physicians, hospitals and other

health care professionals who have not contracted with a health plan to provide services. Also

called "non-preferred provider." You may pay more when visiting one of these providers.



Non-preferred brand name – A drug that is marketed by manufacturers under a patented brand

name. This category is non-preferred because it is not a part of a health care plan’s formulary. You

will pay the most for this type of prescription.



Normal retirement age – Under a retirement plan, the normal age for full benefits to begin. Since

full Social Security benefits are currently available at age 65 for most retirees, although it will

gradually rise to age 67 in 2027, age 65 is often the normal retirement age.



Normal retirement date – Under a retirement plan, the normal date for full benefits to begin. It

may be based on a number of years of age or a combination of age and service.



Notice period – The lead time a company requests before a leave under the Family Medical

Leave Act can begin.



Nursing home – A licensed facility that provides skilled nursing care, but does not meet

Medicare's definition of a "skilled nursing facility."



Nutritional counseling – Some medical plans cover nutrition education and planning. This allows

a duly certified nutritionist to help manage a newly diagnosed or newly deteriorating medical

condition, such as diabetes, that may be partially controlled by diet. Such counseling is generally



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not covered for general health or wellness, or weight loss or gain objectives that are not associated

with a diagnosed illness.





O

OASDHI – See “Old-Age, Survivors, Disability and Health Insurance.”



Occupational illness or injury – Health problems caused by work or work conditions.



Occupational therapy – Treatment after illness or injury to increase a patient's use of fine motor

skills needed in daily living.



Office visit – A personal visit between a physician and a patient in an office or hospital.



Old-Age, Survivors, Disability and Health Insurance (OASDHI) – More commonly known as

U.S. Social Security benefits.



Onlay – An oral restoration process that covers the entire biting surface of a tooth, such as to

replace a lost part of a tooth or to improve occlusion (bite) by increasing the height of a tooth.



Open access – See “Direct Access.”



Open enrollment – A period of time, often in the fall, when employees may make choices

regarding their health care benefits for the following year.



Open matter – In legal services plans, an open matter is a matter on which a participant has

consulted an attorney and the attorney has begun to represent the participant.



Option – A contract giving the holder the right (but not the requirement) to exercise an option to

buy or sell at a particular price. Employers sometimes grant stock options to employees giving

them the right to buy employer stock at a given price (the exercise price).



Oral surgery – Surgery of the mouth, such as removal of an impacted wisdom tooth.



Organ donation – The donation of an organ or bone marrow from a living or dead person. Costs

for the donor and the recipient may or may not be covered under a medical plan. Such services

generally require preauthorization, and may need to be performed at a special center, sometimes

called a Center of Excellence.



Original Medicare Plan – See Medicare Part and Medicare Part B.



Orthodontics, orthodontia – Dentistry to detect, prevent, and correct abnormalities of the position

of teeth (straightening teeth).



Orthotics – Medical equipment designed to support a weak or nonfunctioning body part.



Out-of-area benefits – For health care plans featuring in-network and out-of-network benefit

levels, the out-of-area benefits are those available to participants living outside the network's

service area.



Out-of-network care – Care provided by a health care provider who does not participate in a

health care company's network.





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Out-of-network provider – A health care provider that does not participate in a health care

provider's network.



Out-of-pocket costs– Amounts, such as copayments and deductibles, that an individual is

required to contribute toward the cost of health services covered by his or her health benefits plan.

In some instances, this term also includes amounts the individual pays for health services not

covered by the plan.



Out-of-pocket maximum – The most a participant will pay for covered medical expenses in

copayments or coinsurance. Some charges do not count toward this maximum.



Outpatient – A patient who is treated in a hospital or other health care facility for fewer than the

number of hours defined by the plan for an inpatient, and who does not incur room and board

charges.



Outpatient care – Care provided to a patient through a hospital or other medical facility that does

not include an overnight stay.



Outpatient diagnostic services/treatment – Care provided to a patient through a hospital or

other medical facility to diagnose injury or disease – without the need for overnight admission.



Outpatient facility – A treatment or diagnosis facility that is licensed and staffed, but does not

provide overnight inpatient care. Examples include laboratories, outpatient surgical centers,

birthing centers, urgent care facilities and outpatient rehabilitation facilities.



Outpatient surgery – Surgical procedures that do not require an overnight stay in a hospital or

other medical facility. Such surgery can be performed in the hospital, a surgery center or

physician's office.



Overbite – The vertical overlap of the upper teeth over the lower teeth.



Overjet – The horizontal overlap of the upper teeth over the lower teeth.



Over-the-counter (OTC) drug – Medication that may be obtained without a prescription from a

medical professional.





P

Paid-up life insurance – Life insurance protection that has been paid in full, with no additional

premiums required to continue it.



Parenting education – Education to improve parenting skills.



Partial denture – A device to replace some, but not all, natural teeth, to be supported by the teeth

or gums. It may be removable or fixed and on one or two sides.



Partial disability – A disability that prevents a person from performing some of the functions of his

or her regular job.



Participating pharmacy – A pharmacy participating in the plan's network.



Participating provider – A physician, hospital, nursing facility or other health care provider that

has contracted with a health plan to provide covered services for a negotiated charge. Also called

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"preferred care provider." You may receive higher coverage (which means you pay less) when you

visit a provider who participates in your health plan network.



Paternity – Fatherhood.



Payment method – For a retirement plan, the method the participant selects for receiving plan

benefits.



Payout events – Events at which retirement benefits are payable. These could include

disability and death as well as retirement or other termination of employment.



PBGC – See “Pension Benefit Guaranty Corporation.”



PCP – See “Primary Care Physician.”



Pedodontics – Dentistry for children.



Pension – Periodic payments.



Pension Benefit Guaranty Corporation (PBGC) – An entity established under ERISA to

guarantee certain benefits for participants in defined benefit plans of companies with more than 25

participants.



Pension plan – A type of retirement plan that provides a set amount of benefit, or a set formula to

determine the amount of benefit. The contributions needed to provide the specific benefits can be

determined actuarially.



Periapical – The surrounding of the tissues and bony sockets of the teeth.



Periodontics – Dentistry dealing with the periodontium.



Periodontium – The bone and tissues supporting the teeth.



Permanently and totally disabled – Disabled as defined by a plan in a manner that is expected to

continue for life.



Personal health record – A safe and private online record of your health history. Your personal

health record (PHR) stores health-related information in a password-protected record. In many

cases, information – such as claims submitted to your health insurer, the location of your last

doctor’s visit, and prescribed treatment – is automatically added by your insurer. Depending upon

the PHR, individuals may have the opportunity to input personal information like family history of

disease, blood type, diet and exercise regimens, and allergies. The Privacy Rule, part of the Health

Insurance Portability and Accountability Act (HIPAA), regulates how health information that can be

linked to an individual may be used.



Personal leave – Time off from work for personal reasons.



Pharmacy and Therapeutics (P&T) Committee – A group of physicians, pharmacists and other

health care professionals who advise a health plan regarding prescription drug formularies and the

safe and effective use of medications.



Physical therapy – Treatment after illness or injury to increase a patient's use of large-muscle

motor skills needed in daily living.



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Physician – A doctor licensed by a state to practice medicine. Some plans cover the services of

providers who are not physicians.



Plan documents – Documents that describe the details of a health plan: what services are

covered, what services are not covered, and what charges the patient will be required to pay

(copayments, deductibles, coinsurance). Plan documents may include a group agreement, group

policy, Certificate of Coverage, Certificate of Insurance or Evidence of Coverage.



Podiatry – Care of the foot.



Point-of-service (POS) plan – A health benefits plan that provides coverage for care received

from both participating providers and non-participating providers. In many POS plans, patients

whose care is directed through referrals from their primary care physician (PCP) receive a higher

level of benefits, while patients who go directly to other physicians or facilities receive a lower level

of benefits.



Policy loan – Loan from an insurance company secured by a policy's cash value or cash

surrender value.



Pontic – The part of a fixed bridge suspended between the abutments that is used to replace a

missing tooth or teeth.



Portability – The ability to keep a benefit policy in force after termination of employment.



POS plan – See “Point-of-Service Plan.”



Postretirement increases – Adjustments in pension benefits after retirement, such as cost of

living adjustments.



Post-tax – See “After-tax.”



PPO – See “Preferred Provider Organization.”



PPO plan – See “Preferred Provider Organization (PPO) Plan.”



Practice guidelines – Also called "clinical practice guidelines," "practice parameters" or "medical

protocols." These guidelines describe optimal approaches to diagnosis and treatment of specified

illnesses or injuries based on current medical research.



Preauthorization/precertification – Under some health plans, individuals are required to secure

advance approval for particular medical services before the insurer will agree to cover the cost of

the service. Such advance authorization is called “preauthorization” or “precertification.” Depending

on the type of plan you have, your physician may request this authorization on your behalf, or you

may be required to secure the authorization yourself.



Predetermination limit/ Predetermination of benefits – Some dental plans suggest that the

participant and the dentist file a "predetermination of benefits" for planned dental care expected to

cost more than a certain amount. The suggested amount is the predetermination limit. This tells the

participant in advance how much the plan will cover, and advises the patient of alternative forms of

treatment.



Pre-existing condition – A physical or mental health condition (other than a pregnancy) or

medical problem that was diagnosed or treated prior to enrollment in a new health plan. Some pre-

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existing conditions may be excluded from coverage during a specified timeframe after the effective

date of coverage in the new health plan.



Preferred brand name – Drugs that are marketed by manufacturers under a patented brand

name. This category is preferred because it is a part of the plan’s formulary. These drugs cost

more than generic, but less than non-preferred drugs.



Preferred provider – A provider who has a contract with the plan to participate in the network. The

contract includes provisions to accept the reasonable and customary charge or allowable amount

for a given service as the full fee.



Preferred Provider Organization (PPO) – A health benefits plan that allows an individual to

choose any medical care provider without designating a primary care physician (PCP). Such a plan

offers higher levels of coverage to those who choose participating or preferred physicians or

hospitals.



Preferred Provider Organization (PPO) plan – A type of medical plan that features a network of

preferred providers. When you elect to receive care from providers in the network, the plan

generally provides a higher level of coverage, and may require less paperwork.



Preferred stock – Stock that pays specified dividends, and has preference over common stock in

dividend payment, and in payment if the corporation goes bankrupt. Unlike common stock,

preferred stock generally does not carry voting rights.



Premium – The amount paid for a fully insured health benefits policy. The cost of the premium is

often shared between you and your employer.



Prenatal and early parenthood education – Education about pregnancy and parenting a young

child.



Pre-retirement survivor annuity – Protection that provides the employee's spouse with a monthly

annuity if the employee dies after leaving the company, but before benefits begin.



Prescription drug – A medication that cannot be dispensed without an order from a medical

professional. The term is used to distinguish prescription drugs from over-the-counter drugs, which

can be obtained without a prescription.



Present value – The value today of a future payment, or stream of payments. This is determined

by discounting the future amount at some rate of interest.



Pre-tax contributions – See “Before-tax Contributions.”



Pre-tax premiums – See “Before-tax Premiums.”



Preventive care – Programs or services that can help maintain good health or detect early signs

of disease. These programs and services may include well-woman gynecological care, well-child

care, routine physical examinations and immunizations, mammograms and colon cancer

screenings.



Preventive dental services – Care to maintain oral health. May include examinations, cleaning,

and bitewing x-rays.







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Primary beneficiary – A person named by the participant to receive insurance or retirement plan

benefits when the participant dies. If no primary beneficiaries are living when the insured person

dies, benefits will be paid to the contingent beneficiary.



Primary care physician (PCP) – A physician who is part of a health plan's network and serves as

a patient's main point of contact for medical care. A PCP typically provides basic medical care, and

coordinates and supervises special care received by the patient. A PCP is usually a general or

family care practitioner, or in some cases, an internist, pediatrician or Ob/Gyn (some plans allow

women to name one primary care physician for most care as well as an Ob/Gyn). PCPs provide

patients with referrals for specialist care or other medical services. In some health plans, you must

choose a PCP to coordinate your care.



Prime rate – The interest rate large U.S. commercial banks charge their best customers.



Private duty nursing – Services provided in the patient's home by a private duty nurse who is

licensed and certificated.



Private fee-for-service plan – A type of Medicare Advantage Plan through a private insurance

company that charges a premium to let Medicare recipients go to any Medicare-approved doctor or

hospital that accepts the plan's payment. The private company, rather than the Medicare program,

decides how much it will pay and how much you pay for the services you receive. This type of plan

may offer extra benefits the Original Medicare Plan doesn't cover.



Probate – Presentation of a person's will to a court, and appointment of an executor or

administrator to carry out the court's instructions. In other words, the process of settling a person's

estate after death.



Profit-sharing plan – An individual account plan a company provides to allow employees or their

beneficiaries to participate in its profits. The plan must have a set formula for allocating the

contributions among the participants.



Prophylaxis – Cleaning of teeth by a dentist or dental hygienist to remove tartar and stains.



Prospectus – The legal document that shows the history, objectives and status of a security issue.



Prosthesis – For medical plans, a device designed to partially compensate for the loss of a body

part, such as an artificial arm, leg, eye, or portion of an internal bodily organ. For dental plans, an

artificial replacement of one or more natural teeth or associated structures.



Prosthetics – An artificial substitute for a missing body part.



Prosthodontics – Appliances to restore oral function.



Provider – A licensed health care facility, program, agency, physician or other health professional

that delivers health care services.



Provider Network – See “Network.”



P.S. 58 costs – The annual cost of life insurance protection provided by a retirement plan that is

included in a participant's taxable income.









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Q

QDRO – See “Qualified Domestic Relations Order.”



QMCSO – See “Qualified Medical Child Support Order.”



Qualified beneficiary – Participants who are eligible for group health plan continuation coverage

under COBRA due to their participation on the day before a qualifying event.



Qualified Domestic Relations Order (QDRO) – A court action that requires payment of part or all

of an employee's retirement benefits to be paid to meet a property settlement agreement, alimony,

or child or dependent support payments, and that is determined to be "qualified" under the Internal

Revenue Code of 1986.



Qualified Medical Child Support Order (QMCSO) – A court action that requires coverage for a

participant's child, and that is determined to be "qualified" under the Internal Revenue Code of

1986.



Qualified medical expense(s) – Federal tax law states that a qualified medical expense is for

purposes of FSA, HRA, HSA and MSA spending. Expenditures from an FSA or HRA must be a

qualified medical expense under this definition. HSA funds may be withdrawn for other purposes,

but such withdrawals are taxable and may be subject to an additional tax penalty. The Federal

definition, which is contained in Section 213(d) of the Internal Revenue Code, is relatively broad,

including all services covered under most health benefits plans as well as certain services and

supplies (such as eyeglasses) that generally are not covered by health plans. Complete details can

be found in IRS Publication 502.



Qualifying event – An event that entitles a participant to continue, under COBRA (the

Consolidated Omnibus Budget Reconciliation Act of1985, as amended), group health coverage

that would otherwise end. Examples include termination or change of employment for the

employee or spouse, annulment or divorce, or death of a covered employee.





R

Radiology – X-rays.



Real estate – Ownership in buildings and land, as well as rights to the air above and the earth

below.



Reallocation – Redistributing assets among options.



Reasonable and customary charge – Limit set by a health plan on the amount it will pay for a

medical service. This limit is often determined by reference to amounts typically charged for a

particular health care service by other providers in the same geographic area, although some plans

may refer to other payment standards (such as the amount paid by Medicare). Also called "usual,

customary and reasonable (UCR)" or "customary and reasonable."



Reduced-hour leave – Some companies' FMLA policy allows an employee to return to work from

an FMLA leave on a part-time basis, or to take the FMLA leave as a reduction in the number of

hours worked per day or per week.



Referral – In some health plans, patients must receive a referral from their primary care physician

(PCP) to receive covered services from a specialist or receive other health care services. A referral



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is a specific set of directions or instructions from a PCP, which direct an individual to a specialist or

facility for medically necessary care. A referral may be written or electronic.



Rehabilitation – Services such as those provided by a physical, speech or occupational therapist

as part of recovery from injury or illness. This may also refer to long-term disability plans that

continue some financial assistance while a person seeks rehabilitation.



Reimbursement – Payment from a health benefits plan to reimburse an individual's covered

medical expenses or directly to a health care professional in payment for services rendered to plan

participants.



Reimbursement account – See “Flexible Spending Account.”



Religious leave – Time off an employee takes for religious reasons.



Renter's insurance – Property/liability insurance for a renter's goods.



Residential treatment – A type of care provided under some plans. Care is provided 24 hours a

day, under the supervision of medical professionals, and is generally less intense than the care

provided in a hospital.



Respite care – Short-term care provided in a patient's home to give the primary caregiver time off,

or short-term child care to provide a break for a parent.



Restoration – For dental plans, any inlay, crown, bridge, partial or complete denture to restore or

replace teeth or tissue. The term applies to the end result of repairing and restoring structure and

function.



Restorative services – For a dental plan, services to restore healthy teeth, such as fillings, inlays

and onlays.



Restorative surgery – Surgery to restore an area seriously injured in an accident, to correct a

birth defect that causes a functional disability, or to restore breast tissue surgically removed in

response to an illness. Where there has been breast disfigurement for a female participant or

covered dependent due to illness, surgery or mastectomy, legislation requires certain plans to

cover reconstructive surgery on the other breast.



Retiree Reimbursement Account (RRA) – Retiree Reimbursement Accounts (RRA) are health

reimbursement arrangements designed to be used in retirement to pay for insurance premiums

and/or qualified medical expenses. Contributions to an RRA are made by an employer. Balances

rollover from year to year in accordance with rules established by the employer. Funds in an RRA

may be used to pay for unreimbursed medical expenses as well as health premiums, including

Medicare Part B and Medigap policies. Reimbursements from an RRA are not considered taxable

income to the retiree.



Roll-in contribution – A distribution an employee received from a former employer's qualified

plan, or withdrew from a conduit IRA, and deposited in a qualified retirement plan with the current

company that accepts rollovers.



Rollover – Payment of all or part of an eligible rollover distribution from a plan to an IRA or to

another employer's qualified plan that accepts rollovers.



Rollover feature – The ability to carry forward or "roll over" any remaining balance in a health fund

to use for covered medical services in subsequent years.

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Root canal – See “Endodontic Therapy.”





S

Salary replacement percentage – Some plans, such as disability benefit plans, are designed to

replace a percentage of the participant's salary.



SAR – See “Summary Annual Report.”



Savings plan – See “401(k) Plan.”



Scaling – The removal of calculus (tartar) and stains from teeth using dental instruments.



SEC – See “Securities and Exchange Commission.”



Secondary beneficiary – See “Contingent Beneficiary.”



Second opinion – Visiting another physician or surgeon for an opinion regarding a diagnosis,

course of treatment or specific types of elective surgery recommended by your physician. Second

opinions are generally voluntary, but may be required in certain instances under some health

plans. This may also include a third physician's opinion if the second opinion conflicts with the first

opinion. The goal is to provide you with the necessary information to make an informed decision

regarding treatment.



Section 213(d) – Section 213(d) of the Internal Revenue Code outlines what a "qualified medical

expense" is for purposes of FSA, HRA, HSA and MSA spending. Expenditures from an FSA or

HRA must be a qualified medical expense under this code section. HSA funds may be withdrawn

for other purposes, but such withdrawals are taxable and may be subject to an additional tax

penalty.



Securities and Exchange Commission (SEC) – The organization of the U.S. government that

administers laws dealing with securities and protection for investors.



Self-insured employer – Also called "self-funded." An employer who takes on the financial

responsibility for paying the health benefits claims of its employees is said to be self-insured

(versus a fully insured employer, who pays a health insurance company to take on financial

responsibility for claims). Self-insured plans can be administered by the employer or an outside

company.



SERP – See “Supplemental Executive Retirement Plan.”



Service – The company may use an employee's service to determine eligibility for benefits,

vesting, or benefit amounts.



Service area – The geographic area in which a health plan is licensed to operate (where

applicable) or, when licensing is not required, the geographic area where an adequate network is

established to provide services covered under a benefits plan.



Sex change – Medical procedures to change a male to a female or a female to a male.



Short-term investment – An investment that matures in one year or less.





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Short-term military service – Military service by a participant that is considered short-term by the

plan.



Sick child care – Special day care designed for children sick enough that their usual care provider

will not accept them.



Sick leave – Time off, generally paid in full, due to illness or injury. Generally sick leave is for a

certain maximum number of days, and may be followed by short-term and long-term disability

benefits.



Sick leave cashout – Some companies allow an employee to cash out accrued, but unused, sick

leave at the end of a year, or at termination of employment.



Single life annuity – A form of retirement benefit that provides monthly payments to the employee

for life, with no benefits payable after the employee dies. For some plans, this is the automatic form

of benefit for single employees, and available to married employees with the spouse's signed,

notarized consent.



Skilled care – 24-hour nursing or rehabilitative care that can only be provided under the direction

of skilled medical professionals.



Skilled nursing facility – A facility that is licensed and accredited to provide inpatient skilled

nursing care.



Social leave – See “Community Leave.”



Social Security – Federal program of old age and survivor benefits covering most employees and

their eligible dependents. The benefits are paid by the OASDHI.



Social Security integration – See “Integration with Social Security.”



Social Security offset – Some programs, including some pension and long-term disability plans,

are designed to provide a certain level of total benefit, including expected Social Security benefits.



Social Security retirement benefits – A government supported retirement benefit program

funded through a federal income tax and paid to Americans based on age, number of years

worked and income earned over an individual's career. Higher lifetime earnings result in higher

benefits, while time off and lower income years may result in lower benefit payments. Age 62 is the

earliest possible retirement age for Social Security benefits, and full retirement age is determined

by year of birth. Choosing to collect retirement benefits before you reach full retirement age results

in permanently reduced benefits.



SPD – See “Summary Plan Description.”



Specialist – A physician who provides medical care in a medical or surgical specialty or

subspecialty (for example, dermatologist, oncologist, etc.).



Speech therapy – Treatment after illness, injury or birth defect to restore a patient's

communication abilities.



Spousal consent – If a married participant under a qualified retirement plan wants to elect a form

of benefit other than the automatic form, or to name a beneficiary other than the spouse, this

requires signed consent from the spouse, witnessed by a notary public or a plan representative.



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Spousal IRA – An individual retirement account that can be established for a non-working spouse.



Status change – Changes that, under federal regulations, permit an employee to make

corresponding changes in enrollment for certain benefits at times other than the annual open

enrollment period. Such changes include a change in:

▪ Eligibility (a child reaches the limiting age for coverage, gets married or leaves school);

▪ Employment (beginning or termination of employment or change in work schedule by the

employee, a spouse or child);

▪ Marital status (marriage, death of spouse, divorce, legal separation or annulment);

▪ Number of family members (birth, adoption or placement for adoption, or death);

▪ Residence or worksite (to move outside a plan's service area).



Stock – Ownership in a corporation, held as shares that are each a claim against the corporation's

assets and earnings.



Stockholder – Someone who holds one or more shares of stock, or ownership in a corporation.



Stock options – Options to buy or sell stock at a particular price (called the exercise price) for a

specified period of time (called the exercise period). When a company grants stock options to its

employees, the exercise price is generally at or below the market price at the time the options are

granted.



Stock purchase plan – A qualified stock purchase plan is an organized program for employees to

buy shares of company stock. It may allow employees to set up periodic deductions to purchase

stock, and/or may allow them to purchase additional shares with dividends. The employer may

contribute, or offer stock at a fixed price (usually below market value). A nonqualified program

allows select employees to purchase stock. They must meet eligibility requirements and hold the

stock for a set period of time.



Stock rights – See “Stock Options.”



Stock split – An action by a corporation that results in more outstanding shares of its stock but

does not change ownership. For example, if there are 10 million shares outstanding and the stock

is trading at $50 per share, a 2-for-1 stock split would result in 20 million shares outstanding at $25

per share. A person who held 5 shares valued at $250 before the split would hold 10 shares, still

valued at $250, after the split.



Stock symbol – The letters used to identify corporations at the stock exchanges where their stock

is traded (such as XON: Exxon). The letters may be the same as or different from the letters used

in newspaper listing.



Strike price – See “Exercise Price.”



Subrogation – A company's right to recover benefits paid in a lawsuit if the injury was the fault of

another. For example, suppose a medical plan pays a participant's expenses due to injury in a car

accident, and later the participant receives a settlement from the driver at fault. The medical plan

can recover certain benefits from the participant.



Subscriber – The individual covered under an employer's group agreement or group insurance

policy. If an employer makes family coverage available, the subscriber may enroll eligible

dependents in the benefits plan.



Substance abuse or chemical dependency – Alcoholism and drug dependency as classified by

the International Classification of Diseases of the U.S. Department of Health and Human Services.

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Summary Annual Report (SAR) – Participants are entitled to this annual report on the financial

strength of a qualified benefit plan.



Summary of Material Modifications (SMM) – Participants are entitled to this summary when a

benefit plan makes material changes.



Summary Plan Description (SPD) – A document that ERISA requires be made available to

participants and beneficiaries (and the DOL upon request). It must summarize the benefit plan in

an easy-to-read format and cover key plan provisions.



Supplemental Executive Retirement Plan (SERP) – A nonqualified plan that allows employers to

offer higher benefits to highly paid employees.



Surgery – A branch of medicine that treats injuries, deformities and illness through operative

methods.





T

Takeover – Change in the controlling interest of a corporation. The takeover may be friendly (often

called an acquisition) or unfriendly (often called a hostile takeover).



Taxable wage base – The Social Security wage base, or the maximum amount of earnings that

are considered wages for that year in calculating Social Security benefits and determining Social

Security taxes.



Tax-deferred – An investment that postpones taxation on earnings until the money is withdrawn.

Examples include individual retirement accounts, 401(k) plans, and tax sheltered annuities (TSAs).



Tax preparation services – Services to prepare participants' tax returns.



Tax sheltered annuity plan (also called a TSA or 403(b) plan) – A plan under Section 403(b) of

the Internal Revenue Code that allows employees of certain charitable and educational institutions

to choose between receiving compensation, and electing to have that compensation contributed on

their behalf to a qualified plan.



Ten-year certain annuity – A form of retirement benefit that provides monthly payments for life,

with payments guaranteed for at least 10 years. The payments are reduced by a percentage based

on your age when benefits begin. If the annuitant dies before all guaranteed payments are made,

the designated beneficiary or estate will receive payments for the rest of the 10-year "certain"

period.



Term life insurance – Insurance for a specific period of time that provides only a death benefit

(does not have an investment feature to accumulate cash values the way whole life insurance

does). Premiums are generally much lower than for cash value life insurance, and also generally

increase each year.



Thrift plan – An individual account plan that allows employee contributions on an after-tax basis,

and generally features some matching contributions by the employer.



Ticker symbol – See “Stock Symbol.”







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Tobacco use – Some health care plans charge different premiums or provide different levels of

benefits depending on whether the participant is a tobacco user. Review your plan for the

definition, including the length of time the participant must be tobacco-free and whether tobacco

use includes snuff and chewing tobacco as well as cigarettes, cigars and pipes.



Top-heavy plan – A qualified plan that has more than 60% of its benefits allocated to key

employees as defined by the plan.



Topical – On the surface. In dental plans, this refers to painting the surface of teeth, such as in

fluoride treatment, or applying an anesthetic to the gum surface.



Totally disabled – Disabled as defined by the plan.



Traditional plan – See “Fee for Service Plan.”



Trauma – Injury; generally, serious and life-threatening injury requiring emergency treatment.



Treasuries – Negotiable securities of the U.S. government, backed by the full faith and credit of

the government. Treasuries provide investment return that is exempt from state and local income

taxes but subject to federal income tax.



Treasury bills – Short-term negotiable securities of the U.S. government issued with terms of a

year or less and sold at public auction at a discount in face amounts of at least $10,000. Treasuries

are backed by the full faith and credit of the government, and provide investment return that is

exempt from state and local income taxes but subject to federal income tax.



Treasury bonds – Long-term negotiable securities of the U.S. government issued with terms of 10

years or longer and in amounts of at least $1,000. Treasuries are backed by the full faith and credit

of the government, and provide investment return that is exempt from state and local income taxes

but subject to federal income tax.



Treasury notes – Negotiable securities of the U.S. government with maturities of from 1 to 10

years. Amounts may range from $1,000 to over $1 million. Treasuries are backed by the full faith

and credit of the government, and provide investment return that is exempt from state and local

income taxes but subject to federal income tax.



TSA – See “Tax Sheltered Annuity Plan or 403(b) Plan.”





U

Ultrasound – Use of high-frequency sound waves to obtain medical information that cannot be

found by x-rays. Often used to monitor the development of a fetus.



Uncontested adoption – An adoption in which all parties agree.



Uncontested guardianship – A guardianship proceeding in which all parties agree.



Uncovered services – Also "Exclusions." Specific conditions or circumstances that are not

covered for benefits under a health plan. These are listed in detail in your plan documents.



Universal life insurance – A flexible form of life insurance in which the policyholder may change

the amount of death benefit (with evidence of insurability for increases), the amount of premium

payments, and when premiums are paid.



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Unmatched contributions – Contributions the employee makes that are over an employer's

matched contribution limit.



Urgent – A medical condition with symptoms severe enough that postponing care for more than a

given number of hours, such as 48, could seriously harm the patient as defined by the plan.



Urgent care – Services received for an unexpected illness or injury that is not life threatening, but

requires immediate outpatient medical care that cannot be postponed. An urgent situation requires

prompt medical attention to avoid complications and unnecessary suffering or severe pain.



Usual, customary, reasonable (UCR) – See “Reasonable and Customary.”



Utilization controls or features – Features designed to control costs and reduce unnecessary

care.





V

Vacation accrual/accrued balance – Vacation time an employee has earned, but not used.



Vacation accrual schedule – The schedule under which an employee earns vacation time.



Vacation buy or vacation purchase – A plan that allows a participant to buy additional paid

vacation time with company consent.



Vacation carryover – The maximum amount of accrued vacation a company allows an employee

to carry over from year to year.



Vacation exchange plan – A plan that allows a participant to buy or sell paid vacation time with

company consent.



Vacation sell plan – A plan that allows a participant to sell paid vacation time with company

consent.



Vaccinations – See “Immunizations.”



Variable life insurance – A form of life insurance with steady premiums but a death benefit that

fluctuates (above a guaranteed minimum) with the value of investments backing the contract.



Variable match or variable matching contributions – The variable amount a company may

contribute to the employee's 401(k) account, in addition to the fixed match, based on the

employee's matched contributions.



Variable universal life – A form of life insurance with the flexibility of universal life insurance

premiums and the investment features of variable life insurance.



Vested – Benefits that have become fully owned by the participant.



Vesting – The employee's ownership of retirement plan money. The employee is always 100%

vested in employee contributions and roll-in contributions plus any investment earnings on those

amounts.







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Vesting service – For retirement plans with company contributions, the percentage of an

employee's benefit that is "vested" (that the employee owns even if he or she stops working for the

company) is determined based on the employee's vesting service.



Voice response system (VRS) – An interactive telephone system that provides benefit

information and/or accepts transactions.



Vouchers – A dependent care option in which the participant submits periodic vouchers for

dependent care to the provider, and the employer covers part or all of the cost.



VRS – See “Voice Response System.”





W

Waiting period – See “Elimination Period.” Also refers to the days between the filing of a

registration for a security with the SEC, and when the security can be legally offered to the public.



Waive – To deliberately give up a known right. For example, a participant eligible for certain

benefits may have the option to waive those benefits.



Well-baby/well-child care – Routine medical care for generally healthy children up through age

eight, including checkups, tests and immunizations.



Wellness (health promotion) program – A health management program that incorporates

disease prevention, medical self-care, and health promotion. Wellness programs focus on

changing and/or reinforcing healthy and safe lifestyle behaviors that can help prevent illness and

disability.



Whole life insurance – Life insurance that provides death benefit coverage but also includes an

investment feature and accumulates cash values. Unlike term insurance, for which annual

premiums generally increase with age, whole life insurance generally has level premiums for the

length of the policy.



Will – A document a person drafts to direct the disposition of assets to be made at his or her

death.



Withdrawal – A distribution from a retirement plan account.



Witness duty – Time off work to serve as a trial witness.





X

X-rays – Radiation of extremely short wavelength that can pass through various solids. X-rays are

used to diagnose, photograph, and even treat certain medical conditions. Although a patient's

exposure to radiation while an x-ray is being taken is quite low, body parts not being x-rayed may

be shielded.









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Y

Years of service – Some plans determine an employee's eligibility for participation, vesting or

benefit amounts based on the employee's service. See the plan for the definition of a year of

service.



Yield – Return on an investment.







Z

Zero-coupon bond – A bond that is purchased for less than its face amount, that pays no interest

until maturity, and that is redeemed at its maturity date for its full face value. For example, a $1,000

five-year zero coupon bond might be purchased for $700 and held for a 5-year maturity, at which

time it would be redeemed for the full $1,000. Because a bond's coupon rate is the rate of interest

the bond pays before maturity, this type of bond has a coupon rate of zero.



This glossary provides a general definition of key terms. See your summary plan description for more specific definitions

and to learn what your plan covers.









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